Port Authority officials make their case for RAD funds

Share with others:

The chairman of the Allegheny Regional Asset District board said Thursday that he favors giving the Port Authority $3 million next year.

That first-ever RAD allocation, along with $1.5 million from Allegheny County's hotel and drink tax, would free up $30 million more in state aid for the financially troubled transit agency.

RAD funds come from one half of the proceeds from a 1 percent county sales tax that supports a variety of cultural, sports and recreational programs and facilities.

"It would be a good use of tax money ... for a service that is vital to the region," board chairman Dan Griffin said of the request.

Members of the RAD board quizzed Port Authority and county officials for almost two hours about the transit agency's finances, cost-cutting efforts and alternative sources of mass-transit funding. The session was held Downtown at the August Wilson Center.

Port Authority CEO Steve Bland said that while people of all incomes use public buses and light-rail vehicles, at least a quarter of riders are poor.

Many of those lower-income residents could not afford the admission fees or ticket costs for RAD-supported institutions like museums and performing groups, Mr. Griffin said. Supporting public transit would increase the benefits they get from paying sales taxes, he said.

Jennifer Liptak, chief of staff for county executive Rich Fitzgerald, and county manager William McKain presented the county's case. Growth in the local economy had increased revenues from the 1 percent sales tax, Ms. Liptak said. That extra money would permit the RAD board to provide money to the Port Authority without cutting current allocations to any of the existing institutions that benefit from the program, she said.

That additional local match from the hotel and drink and sales taxes would be multiplied several times over in additional state and federal subsidies for the Port Authority's operating budget, Mr. Bland said.

Board member Stanley Parker asked why the county did not instead raise the hotel and drink tax from the current 7 percent back up to the original 10 percent?

No increase in any county tax was "viable" for 2013, Ms. Liptak said. She noted that property owners already had seen their county real-estate taxes jump 21 percent for this year.

The county's current operating budget was $784 million. Couldn't the county find that $3 million by making cuts elsewhere? Mr. Parker asked.

The budget already was tight and the county was perilously close to exhausting its fund balance, which is used to cover used to cover emergency or unexpected expenses, Mr. McKain said.

While the Port Authority had filed an application for one-year RAD funding, the county and the state really were seeking a 10-year commitment, Ms. Liptak said. Board member Don Linzer questioned whether the current RAD board could bind their successors to decade-long funding.

The rescue plan for the Port Authority depended on an additional $30 million transit subsidy each year from the state, Ms. Liptak said. Long-term prospects for that money depend on the state Legislature passing a comprehensive revenue plan. Those new funds would pay for repairs to deteriorating roads and bridges as well as additional mass-transit funds, she said.

Like other institutions aided by RAD funding, the Port Authority would return each year to seek an allocation for the following year, Ms. Liptak said.

Six of seven board members would have to approve an allocation for the Port Authority. Mr. Griffin said he believed the board was likely to act favorably on transit funding. "I think we can come to some agreement on the length of a future commitment," he said.

In a separate action this week, the RAD board agreed to hire a special counsel to research whether or not the agency could legally allocate sales-tax revenues to help fund mass transit.

The board has retained senior attorney John Vogel, from the law firm Tucker Arensberg, to study the question and make a recommendation. Mr. Vogel will be paid $275 per hour.

Board members decided the agency could not use its regular senior counsel, James Norris, of Eckert Seamans, because his firm also provides legal services to the Port Authority. Mr. Norris agreed with the decision to retain an outside lawyer to avoid any possible conflict of interest, RAD director David Donahoe said Thursday.

While Mr. Vogel was not given a deadline for producing an opinion, the board needs an answer within the next month. The RAD board's allocation committee is required to provide a preliminary budget showing proposed funding for next year at least 90 days before the end of the year. A final budget has to be passed by Dec. 1.

On its website, the agency describes its mission as providing grants to regional assets that include "civic, cultural and recreational entities, libraries, parks and sports facilities."

The $3 million commitment being sought from RAD is one element in a plan championed by Mr. Fitzgerald to head off deep cuts in bus and light-rail service and layoffs at the Port Authority that had been scheduled to take effect Sept. 2.

Last month, the state agreed to provide additional transit funding if the county pledged an additional $4.5 million. Those offers were part of an effort to close a $64 million budget gap for 2012-13. They were made after transit workers accepted a new labor contract expected to save about $60 million over four years, and Port Authority management found savings of $40 million over the same period.